Fidelity Union Life Ins. Co. v. Huff, 3459

• Court: Texas Civil Court of Appeals
• Writing for the Court: TIREY
• Citation: Fidelity Union Life Ins. Co. v. Huff, 305 S.W.2d 209 (Tex. Ct. App. 1957)
• Decision Date: 25 July 1957
• Docket Number: No. 3459,3459
• Parties: FIDELITY UNION LIFE INSURANCE COMPANY, Appellant, v. Leslie HUFF, Appellee.

Page 209

305 S.W.2d 209

FIDELITY UNION LIFE INSURANCE COMPANY, Appellant, v. Leslie HUFF, Appellee.

No. 3459.

Court of Civil Appeals of Texas, Waco.

July 25, 1957.

Rehearing Denied, Sept. 12, 1957.

H. B. Houston, Dallas, for appellant.

Thompson, Knight, Wright & Simmons, Dallas, Bryan, Maxwell, Bryan & Wilson, Waco, for appellee.

TIREY, Justice.

Appellee brought this action against appellant for accrued renewal commissions due him as an agent of appellant and for accrued overwriting renewal commissions due him for his services as a branch manager of the company. A declaratory judgment was also sought for both renewal commissions and renewal overwriting commissions to accrue in the future. All accrued sums were stipulated, and the only issues presented arise out of the construction of the contract of the parties and the recovery of attorney's fees. The cause was tried without a jury and the court sustained the contentions of appellee as to the contract and also awarded appellee the sum of $2,000 as attorney's fees. The appellant seasonably perfected its appeal to the Dallas Court of Civil Appeals and the cause is here on transfer order of our Supreme Court. There was no request for findings of fact and conclusions of law and none filed.

The decree awarded appellee the following:

'1. $604.90, representing renewal commissions on plaintiff's personal production as agent which have accrued through April 1956, against which renewal commissions there has been applied a collection fee of 2 per cent of premium.

'2. $3,576.25 representing renewal overwriting commissions which have accrued through April 1956, under Plaintiff's Manager's Contract on his agency's production prior to April 15, 1950, against which renewal overwriting commissions there has not been applied a collection fee of 2 per cent of premium, the court finding that the said collection fee is not applicable to said renewal overwriting commissions.

'3. $5,061.35 representing renewal overwriting commissions which have accrued through April 1956, under plaintiff's manager's contract on his agency's production for the period April 15, 1950 to March 24, 1951, against which renewal overwriting commissions there has not been applied a collection fee of 2 per cent of a premium, the court finding that the said collection fee is not applicable to said renewal overwriting commissions.

'4. $2000.00 attorneys' fee. (The amount of the award is not assailed).

'The aggregate of the above items and the total of plaintiff's judgment herein against defendant is $11,242.50.

'It is further adjudicated that plaintiff is entitled to receive from defendant renewal commissions as the same have and may accrue subsequent to April 30, 1956, on plaintiff's personal production as agent, upon all of his personal production produced up to and including April 15, 1950, against which renewal commissions there shall be applied a collection fee of 2 per cent of premium; that plaintiff under his Manager's Contract is entitled to renewal overwriting commissions of 2 1/2 per cent of all renewal premiums on business produced by his agency to March 24, 1951. As the case may be, plaintiff shall be entitled to a total of nine renewal commissions and nine renewal overwriting commissions.'

The decree is assailed on four points. They are substantially to the effect that the court erred (1) in holding that a provision of the contract, denying appellee any right to renewal commissions on business written during any uncompleted contract year, applied only to appellee's personal production and not to the production of the general agency under his supervision; (2) in holding that a provision of the contract for a charge of 2% of the premiums against renewal commissions accruing after the agent's leaving the service of the company applied only to appellee's personal production and not to the production of the general agency under his supervision; (3) in allowing attorney's fees in addition to the damages, because (a) the suit was not of the character contemplated by the statute authorizing recovery of attorney's fees; (b) there was no pleading or proof of the requisite demand, and (c) the cause of action for attorney's fees was barred by limitation.

A statement is necessary. On April 15, 1937, appellant and appellee entered into a written contract, denominated an 'Agent's Contract,' providing, among other things, for certain renewal commissions to be paid appellee. We quote the parts of the contract we deem pertinent to the points before us:

'9. The number of renewal commissions, if any, to which the agent shall be entitled shall be determined at the end of each calendar year and shall be based upon the amount of new insurance secured and paid for by the agent in the preceding twelve months as shown by the agent's ledger account kept by the Company at its Home Office, in accordance with the following schedule:

'50,000 but less than $100,000 new insurance in any year, renewal commissions thereon for the second to the sixth policy years inclusive.

'100,000 or more new insurance in any contract year, renewal commissions thereon for the second to the tenth policy years inclusive.

'(a) The said Agent shall not be entitled to receive renewal commissions on the premiums on new insurance secured and paid for by him during any such above referred to one year period in case such new insurance shall amount to less than $50,000. It is further understood and agreed that in order to qualify for non-forfeitable renewals the Agent must write and pay for $50,000 or more of new insurance in each year for three consecutive years following the date of this contract. * * *

'(e) It is further agreed that no renewal commissions shall be payable on the business produced during any contract year not fully completed by the Agent while in the service of the Company, any volume of insurance written during such year and paid for in cash notwithstanding. * * *

'12. In the event of the termination of this contract within three years from the date it takes effect, no renewal commissions shall be payable after such termination. If the Agent complies with all the terms and conditions of this contract, and continues in the exclusive service of the Company for a period of not less than three years from the date this contract takes effect, then renewal commissions shall be payable as provided in Paragraph 9, subject to the provisions of this contract. In the event of the termination of this contract under conditions that provide for the payment of renewal commissions, such renewal commissions shall be subject to a collection fee of 2 per cent of the renewal premiums, and provided further that such renewal commissions shall continue only so long as the insurance in force written under this contract and on which renewal premiums are being received by the Company equals or exceeds $100,000.'

Also, on April 15, 1937, and contemporaneously with his agency contract, appellant wrote appellee to confirm their verbal agreement that appellee was to become a branch manager. We quote this letter:

'This letter is written to confirm our verbal agreement that you are to become Branch Manager of our Temple office, effective April 15, 1937. For your services as Branch Manager the Company agrees to pay you a salary of $100.00 per month.

'It is understood and agreed that when your agency is paying for $750,000 of business per year your salary will be increased to $150.00 per month; that when your agency is paying for $1,000,000 of business per year your salary will be increased to $200.00 per month; and that when your territory is paying for $1,200,000 per year your salary will be increased to $250.00 per month.

'It is further agreed that you are to receive 2 1/2 per cent renewal overwriting commission on all renewal premiums on business written by and through your agency, upon plans upon which the Company regularly pays renewal commissions.

'It is further understood and agreed that while the $100.00 salary is being paid, if your agency pays for more than $500,000 of new business within any one calendar year the Company will pay $1.50 per thousand bonus on the amount paid for in excess of $500,000. Likewise when the $150.00 per month salary is being paid this $1.50 per thousand bonus will apply to all paid-for business per year in excess of $750,000. When the $200.00 per month salary is being paid this $1.50 per thousand bonus will apply on all paid-for business per year in excess of $1,000,000, and when the $250.00 salary is being paid the $1.50 per thousand bonus will apply on all paid-for business in excess of $1,200,000 per year.

'Conforming to the terms of the principal contract to which this supplemental agreement is attached, it is fully agreed that in computing volume Term and Modified Life will count half.

'You may attach this letter to your regular contract to become a part of it and...